1. Field of the Invention
The present invention generally relates to on-line purchases and purchasers and in particular to methods of handling on-line purchasers.
2. Related Art
More and more consumers are purchasing items and services over electronic networks, such as the Internet. Consumers routinely search for and purchase products and services from merchants and individuals alike. The transactions can take place directly between an on-line merchant or retailer and the consumer, where payment is typically made by entering credit card or other financial information. Transactions can also take place with the aid of an on-line payment provider, such as PayPal, Inc. of San Jose, Calif. Such payment providers can make transactions easier and safer for the parties. Purchasing through the Internet from the convenience of a consumer's home, office, or virtually anywhere (with mobile devices) is one main reason why on-line purchases are growing faster and faster.
However, with the proliferation and ease of on-line purchasing, abuse of on-line purchasing has also increased, especially with the growing popularity of digital goods through social networking sites, such as Facebook and MySpace. An expanding area of abuse is with returns or refunds of purchased items. For example, a user may purchase a digital good, such as a virtual beer or virtual flowers, to send to someone on a social networking site. After downloading or sending the digital good, the user may then request a refund from the merchant, with or without cause. For the latter, many merchants allow unconditional refunds on purchases of digital goods or other types of items, as a means to promote sales and use. Even if the digital goods are very inexpensive, e.g., 99 cents, the volume of refunds can result in both a not insignificant revenue loss for the merchant and large losses of time processing the refund request for the payment provider and/or the merchant. With digital goods, the consumer realizes the benefit (e.g., ability to download or send the good), without any cost (a refund of the purchase price).
One response to users abusing refund policies is to increase the requirements for a refund. This may include requiring a purchaser to provide a reason for the return, allowing returns only within a certain time period, giving only partial returns once the good or item is purchased, or something as harsh as an absolute no-refund policy. However, increasing requirements for refunds may reduce the effectiveness of the merchant's goals to attract consumers to the site and for purchases.
Thus, there is a need for a more effective way handling on-line refunds without alienating desirable consumers.